Finland

Introduction to Software Protection under Finnish Law

Body of law

Copyright protection of software is regulated in Finland under the Copyright Act which was originally enacted on 8 July 1961 and has been amended multiple times thereafter. The current version of the Act is available in Finnish and Swedish via the Finlex-website of the Ministry of Justice, www.finlex.fi. An unofficial translation of the act by the Ministry of Justice is also available, although it is not as up to date as the Finnish and Swedish versions. 1 This Act provides for stipulations on copyright and many neighbouring rights, such as the right to a database and right to directories. Software copyright is covered by the general stipulations on copyright and a number of software specific stipulations.

The Copyright act implements the Council Directive of 14 May 1991 on the legal protection of computer programs (91/250/EEC) into Finnish national law by amendments enacted on 11 January 1991 (many principles were anticipated at this time) and 7 May 1993. The original paragraphs then enacted have thereafter been modified and replaced in subsequent amendments.

In the current Copyright Act, the relevant articles containing computer program specific stipulations are:

Copyright Act: Object of Protection

Computer programs are protected by copyright as literary works, as stipulated in Article 1 of the Copyright Act. In order to benefit of the protection, a computer program needs to be original in the sense that it it is the author’s own intellectual creation.2 As stipulated in paragraph 3 of article 1 of the computer software directive, no other criteria may be used to determine whether the program can be subject to copyright protection. Based on this it has been argued that computer programs are eligible for copyright protection even with less requirements than with other literary works, which need to surpass a threshold of originality.3 The case-law on computer programs and eligibility for copyright protection is scarce.4

Authors/Beneficiaries

Copyright to a work, such as a computer program belongs to the author. An author is always a natural person, since only individuals may create intellectual creations.

There is only one automatic transfer of copyright in the Copyright Act. Under Article 40 b, if a computer program and a work directly relating to it has been created in the fulfillment of duties arising from an employment relationship, copyright to the program and the work passes to the employer. The same applies to creations of functionaries of public entities.

Computer program covers software code (in source and binary form). Source code commentaries in the code fall under the definition of computer software (or at least under works that directly relate to computer software). Source code documentation is a work that directly relates to computer software. Supporting material also classifies as a work that directly relates to computer software.5 As supporting material can be considered user manuals, instructions or the like. Other works contained in the software (such as text, music, pictures, forms, movies) may fall under the definition of “works that directly relate to it”, but it is not certain to what extent this is the case. According to the preparatory works (HE 161/90), e.g. a text file contained within the program would fall within a work that directly relates to the program.

Right to databases created similarly in employment or as functionaries are equally passed to the employer or public body.

Exclusive rights

The general exclusive rights stipulated in the Copyright Act apply to computer programs. According to article 2 of the Copyright Act the economic rights comprise the exclusive right to dictate on the work by (a) reproduction of copies and (b) dissemination to the public as modified or not, as a translation or adaptation or in another literary or artistic form or in another way.

As reproduction of a copy is considered reproduction in whole or in part, directly or indirectly, temporarily or permanently and with any means and in any form. Transferring of a copy to a device in which it can be performed is also considered reproduction.

Dissemination to the public occurs when 1) the work is conveyed to the public with or without wiring, including conveying of the work in a way that individuals within the public may access the work from a place and at a time chosen by such individuals; 2) the work is publicly performed to an audience present; 3) a copy of the work is offered for sale, rental, lending or it is otherwise distributed to the public or; 4) the work is displayed publicly without technical aid. As public performance and conveyance to the public is also considered performance and conveying to a quite large closed circle with a purpose to earn.

Exceptions to Exclusive Rights

Article 19 of the law provides that the first sale in the European Economic Area of a copy of a program with the consent of the right holder shall exhaust the distribution right of that copy within the Area, with the exception of the right to control further rental or lending of the program or a copy thereof.

Article 25 j provides that

(1) In the absence of specific contractual provisions, no authorization by the rightholder is required for acts necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including error correction.

(2) The reproduction by way of a back-up copy by a person having a right to use the computer program may not be prevented, insofar as that copy is necessary to use the program.

(3) The person having a right to use a copy of a computer program is entitled, without the authorization of the rightholder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while lawfully performing any of the acts of loading, displaying, running, transmitting or storing the program.

This article basically restates the three exceptions of article 5 of the Computer Program Directive. The exceptions (2) and (3) are mandatory and a contract stipulation to the contrary is void.

Article 25 k of the law explains in detail in which circumstances no authorization of the right holder is required to reproduce and/or translate a computer program in order to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs. This exception is mandatory and a contract stipulation to the contrary is void.

Moral rights

General stipulations in the Copyright Act on moral rights applies to computer programs. Moral rights constitute of the paternity right and the right to require respect of the author. Paternity right means that in reproduction and in dissemination to the public, the author has to be stated in accordance with good practice. Any modification of the work must respect the author in a way that the literary value and originality of the work is not infringed in a manner offending the author.

Due to the nature of computer programs, the moral rights is considered to have only a lesser importance. Computer programs can hardly be modified in a way offending the author. The good practice in the field does not normally require stating the name of the author when the author is an employee and the copyright holder is the employer.6

Moral rights may not be transferred. Moral rights may be waived in a connection where the work is used in a manner that is limited in scope. This applies equally to the right of paternity and the right to respect.

Term of protection

The term of copyright protection for computer programs is the same as for other works. Under Article 43 of the Copyright Act: 70 years following the year of death of the author. In case of multiple authors, this is calculated from the year of death of the author who died last. In case of derivative works, the copyright term of the right of the modifier is independent of the copyright term of the original work, i.e. the copyright to the modifications lasts until the 70 years following the year of death of the author of the modifications.7

Copyright assignment

Copyright can be assigned in full, except for moral rights. Moral rights include most importantly the obligation to state the author when distributing the work to the public and also, although hardly applicable to computer software, the prohibition to change the work in a way that offends the author. Under Finnish law, no requirement of form is presumed and the Copyright Act does not contain any stipulated requirement of form. Therefore assigning of copyright is not subject to requirements of form. For example oral contracts could be possible, however, for the purposes evidencing the contract, written contracts are recommended.

A copyright assignment does not include the right to further assign the copyright, nor the right to modify the assigned work, unless it is agreed to the contrary in the contract of assignment. Therefore these rights should be expressly included in any assignment, if full assignment is the objective.

As to applicable law, it seems possible that copyright created under the Finnish Copyright Act can be assigned under some another law, if such applicable law is agreed in the assignment contract. However, this is not totally certain. The uncertainty comes from the question whether the freedom of contract can cover all aspects of a right based on law.

In the relationship of employee and employer, copyright to a computer program and a related work passes automatically to the employer based on Article 40 b of the Copyright Act. This has been described in more detailed in the numbered paragraph 5. Copyright to any other type of work will remain by the employee, unless a specific agreement on copyright assignment has been entered into. This could be done in an employment agreement or otherwise. In lack of a specific agreement on assignment, the employer will receive a right of use. The exact coverage of such right of use is unclear: at least it covers the primary use of the work known at the time of creation of the work.

In the relationship of a contractor and a procurer, there is no difference between computer programs and other types of works. The copyright to the created work is held by the the creator of the work, i.e. the contractor. If no explicit assignment is agreed, then the contractor will continue to hold the copyright to the created work and the procurer will receive a right of use in accordance with the agreement between the parties. In lack of a specific agreement, the right of use is presumed and derived from the joint purpose of the parties.

An unpaid contributor is handled similarly as a contractor. In lack of a specific agreement on assignment or right of use, a right of use is presumed and derived from the joint purpose of the parties.

Special Measures

In general the Copyright Act contains civil law sanctions for breach of copyright and some provisions on criminal sanctions regarding lesser crimes. The Penal Code contains criminal sanctions on more severe copyright and related crimes. There are some criminal consequences that are specific to, or relate only to computer programs.

As a crime is considered (i) disseminating to the public or holding for dissemination to the public, (ii) with a purpose to earn, (iii) tools which are exclusively aimed at facilitating the unlawful removal or circumvention of technical means protecting a computer program.

The provisions regarding prohibition of circumvention of technological measures do not apply to computer programs (Articles 50 a , 50 b and 50 c).

Unprotected software and public domain software

As set forth above, only software that is original in the sense that it is an intellectual creation of the author benefits of copyright protection. As stipulated in paragraph 3 of article 1 of the computer software directive, no other criteria may be used to determine whether the program can be subject to copyright protection. This is different than with other works which need to surpass a threshold of originality. Although this requirement of the directive has not been implemented to the Copyright Act, legal literature considers it applicable in Finland. Based on this it has been argued that computer programs are eligible for copyright protection even with less requirements than with other literary works, which need to surpass a threshold of originality.8 The case-law on computer programs and eligibility for copyright protection is scarce.9

Non-original software does not come into consideration for copyright protection and can be used freely from a copyright perspective. The minimal case-law references were described in footnote 1.

There is no concept of public domain in the Finnish Copyright Act.10 However, based on the general principles of law, it can be concluded that it is possible that an author decides to grant a computer program into the public domain. This grant is possible vis-a-vis the economical rights, but not vis-a-vis the moral rights. Public domain computer programs are generally understood to mean such works of which the author has renounced all copyrights and which can therefore be freely used, with the exception of moral rights (for discussion on the content of moral rights, see numbered paragraphs , and ).

Although it is uncertain what is required for a notice to fully place a program to the public domain, the writer of this explanation would deem notices, given by the author, such as “This program is placed into the public domain” or “This program is in the public domain” to be sufficient under Finnish law. In this context, one must remember the requirements in relation to assigning copyright. In order for an assignee of copyright to have the right to modify the work, such right must be agreed upon in the assignment contract (Article 28 of the Copyright Act). If placing a work to the public domain is compared to an assignment of copyright to the public, the question is, should the public domain notice include a statement on modifications. My conclusions is that it should not, since the right to modify a public domain work is so clearly intended by an author placing a computer program into public domain.

FOSS is not considered public domain software under Finnish law. This is simply because an author of FOSS reserves the copyright. An author placing a work into the public domain does differently: he or she renounces copyright.

Analysis of FOSS under Finnish Law

Under Finnish Copyright Law, FOSS licenses can be analysed on a very general level as follows. Nothing else than the FOSS license grants the user of the computer program the rights that he needs in order to comply with copyright legislation. Therefore a user needs to benefit from the license, and that can only be done by fulfilling the license conditions. To the extent the license constitutes an agreement, the user would need to accept the conditions.

Copyrights

Although FOSS can be written by one person or be owned by one legal entity, FOSS can in many cases be the result of the work of several authors. The question is whether later additions create a jointly created work (Article 6 of the Copyright Act), or whether the original software is the end work and every contribution created during the further development of the software, a derivative work (Article 4 of the Copyright Act). The legal consequences are different.

Qualification of FOSS

A work that has been originally created by several parties, is a jointly created work. In addition, any work in which the end result is such that the individual contributions cannot be separated from each other, is a joint work. The joint working can occur both simultaneously and successively.11

FOSS can also consist of an original work and modifications made to it. The end result is thus a derivative of the original work.

FOSS can also become a collective work which is a combination of many parties’ works. In this case the author of the collective work is the person assembling and choosing the different works. The permission of the author of the collective work is again required for deciding on the license to the whole.

Looking at the different legal scenarios in the light of FOSS development, it seems that many FOSS projects could be partly jointly created works (e.g. the portions created jointly by the project), partly derivative works (e.g. the contributions received later on) and partly collective works (e.g. the third party FOSS components included in the project).

The version control systems used in computer program development make it often easy to separate between contributions of different persons. Although this might make it possible to assess everything as derivative works, it is uncertain whether jointly planned and executed computer programming would still be joint work, even if a version control system can be used to track every addition of a character to the code.

Rights of the original co-authors

In the case of a jointly created work, the copyright is held jointly, meaning that each author’s permission is required for the exploitation of the work. E.g. the decision of the downstream license needs to be joint.

In case the joint authors have not agreed or cannot agree upon the license, the work cannot be licensed at all. The regulations on joint ownership is applied and, in the end, if no common solution is found, the parties have the option to apply for separation of the joint ownership. The end result could be that the work is auctioned.

Written upfront agreement between the most important contributors is recommended, when starting a new project. Oral agreements can be in principle executed as well as written agreements, but typically it is not easy to show the content of such agreement. A written agreement should cover the nature of the project, the roles of the parties, the copyright notices used, the downstream license applied, the way to make decisions and the ways to change the agreement.

Every author of a jointly created work, has the right to present claims on the basis of copyright infringement. In this case, no joint decision is required.

Authors of derivative works

Most FOSS projects will include derivative works. Even all contributions can be considered derivative works. In this case the copyright to the original work is held by the original author, whereas the copyright to the modifications is held by the next author. These copyrights are – when separated – independent and full copyrights, but the derivative work cannot be distributed without the consent of both authors.

The combination of the original work and the modifications se can be used only by the permission of both the original author and the next author. The downstream license to the whole will need to be agreed together.

A written upfront agreement is recommended between the major contributors starting the project. See the numbered paragraph

Enforcement by the authors can occur separately. Each author is able to enforce only the part in which he or she holds the copyright.

The assignment of copyrights

In order to control the project in an organised manner, it may be useful to collect all copyrights concerning a FOSS project within one organisation (i.e. a legal entity). The existence of this organisation will simplify the management and enforcing of the joint rights12. The assigning of copyrights is perfectly possible under Finnish law, as long as the requirements for assigning copyright are fulfilled (this has been discussed earlier starting from the numbered paragraph ). Assigning can also be made by way of a fiduciary assignment of copyrights. The fiduciary assignment means that the party to whom the copyrights are assigned shall not act for himself but on account of others who have transferred the rights (the original authors). A fiduciary assignment would ressemble ordinary assignment added with contractual conditions regarding the fiduciary’s and original authors’ roles, rights and responsibilities.

Moral copyrights

As described earlier (see starting from the numbered paragraph ), moral rights cannot be assigned under Finnish law, nor can they be fully waived. However, they have less important as regards computer programs.

In Finland, it is considered that the good practice in the software industry does not require the employer to state the names of the employee authors (or contractor personnel) in connections with the dissemination of the computer program. However, this is not necessarily so for FOSS, since (I) the authors have not assigned their copyrights to the third parties disseminating the program, (II) the authors have not received salary or another compensation from the third party and (III) often the authors are keen to receive acknowledgement on and respect for the use of their works.

Moral rights apply equally to FOSS regardless whether it has been created as a derivative work, joint work or otherwise. Each relevant author has his or her moral rights.

Enforcing FOSS licenses

In general, FOSS licenses can be deemed enforceable under Finnish law. There is no existing case law on FOSS licenses, but nothing else grants a third party distributor the right to distribute the FOSS, but the license. There are no formal requirements for granting licenses. Therefore, FOSS licenses are enforceable.

However, it might be difficult to clearly attach a computer program to a license. The project may have done their homework poorly and the license is not adequately communicated to the users, or there are discrepancies in the information given. License attachment clauses might be unclear. These might lead to interpretation. Also, individual licenses may have wordings that are subject to interpretation and not all elements of all licenses are necessarily enforceable or, they might be interpreted differently than what was assumed by a project. These uncertainties do not mean that FOSS licenses would be unenforceable, but the end result of the enforcement might be not satisfactory due to inclarity of licensing.

There is very little discussion in Finland on whether a computer program license is (I) an agreement between the copyright holder and the user including copyright permissions grants or (II) whether it is a unilateral permission by the copyright holder alone. In both cases, the document will need to grant the copyright permissions. As regards execution possibilities, copyright related execution possibilities would apply in both cases. Contract related execution possibilities would be applicable in the contract situation and probably be applicable in the unilateral permission situation too. Therefore there is little or no difference between these legal concepts.

Violation of a license condition would normally classify as a copyright infringement. A FOSS license cannot be deemed as solely a transfer of a copy of a work and therefore all types of conditions contained in a license – depending on the wording of the license – can be considered as prerequisites for the copyright grant. Not observing these could be construed as losing the copyright grant and therefore resulting in a copyright violation, and not a mere contract violation.

Waiver and liability

Typically, FOSS licenses contain very strong liability limitation clauses, which discharge the author from all liability. Most clauses discharge all liability for quality faults in the software and many clauses discharge also liability for issues in the title to the FOSS. The reason for this is that FOSS is mostly made available without a fee, as a result of which the author generates insufficient income to pay for liability insurances and legal costs13.

Where business models are built around FOSS, many times guarantees are offered against a fee, or as a part of payable services.

There is no general requirement to offer warranties in (I) business to business or (II) individual to business or (III) individual to individual relations. Thus FOSS liability limitations can be considered valid. In a very rare occasion, the reasonability of such a provision could be contested. However, since FOSS is mostly licensed without a fee, this would need to be a very special situation to be able to succeed on grounds of being an unreasonable contract term.

However, in relationship between a business and an individual, who is using the product of the business as a consumer, there are requirements as to different types of faults in the product. These requirements apply to consumer products and not so to services. Whereas computer software can be considered a product in some cases (typically for the off-the-shelf proprietary software sales), this would not normally apply to FOSS. However, since FOSS is normally not sold for a fee, and even proprietary off-the-shelf copies sold include often full liability limitations, the risk in that a FOSS license liability limitation would be deemed contrary to law or unreasonable, can be seen as low.

Product liability rules are generic and do not specifically react to software licensing regimes.

The copyleft principle

Principle

A characteristic found in different (but not all14) FOSS licenses is the so-called “copyleft” principle. FOSS licenses which incorporate the copyleft principle15, lay down as a license provision that in order to be entitled to further distribute the program with modifications, such modifications must be licensed under the same terms as the original program. The extent of “modifications” vary. In some licenses only direct modifying of the files are considered modifications, whereas in others any creation of derivative work is subject to the copyleft rule.

The copyleft principle may – depending on the case – restrict the commercial use possibilities of the software. Sometimes fears are expressed that a copyleft software could unintentionally cause the company’s copyrighted works to become subject to a copyleft license. This is a misconception. The sanction for incorporating copyleft code in an unpermitted manner into proprietary software are the normal copyright law sanctions resulting for unpermitted use of a copyrighted work.

Validity

Copyleft clauses are as valid as any other clauses in copyright licenses. This has been discusses earlier starting from numbered paragraph Some copyleft clauses (notably in GPL version 2 the question on the extent of copyleft is unclear) are unclear and may as such become subject to interpretation.

Compensations and Damages

Copyright violations entitle the copyright holders to claim for copyright compensation and damage. Copyright compensation is typically equal to the license fee charged for the infringing act, if the license had been lawfully acquired. Damage is any damage occurring due to the infringement, e.g. costs due to specialist work for inspecting the infringing acts. In addition, legal and other costs are compensated in principle fully, but in practice to some extent.

In FOSS context, the amount of copyright compensation can be difficult to establish. If FOSS has been distributed against the copyleft principle, the compensation would in principle be the license price the copyright holder would ask for such distribution.

FOSS Cases in Finland

No cases have been reported yet (April 2011).

Recommended literature

There are no wider literature presentations on Finnish Copyright legislation in English. The references here are to literature in Finnish or Swedish.

1 Finnish version: http://www.finlex.fi/fi/laki/ajantasa/1961/19610404, Swedish version http://www.finlex.fi/sv/laki/ajantasa/1961/19610404 and the unofficial translation to English http://www.finlex.fi/fi/laki/kaannokset/1961/en19610404. Links retrieved on 20 April 2011.

Act regarding the transposition into Belgian law of the European Directive of 14 May 1991 on the legal protection of computer programs of 30 June 1994, Belgian Official Gazette B.S., 27 July 1994.

4 A decision by the Appeal Court of Helsinki on 28 December 1999 (R 99/661) discusses the question of a computer program’s eligibility for copyright protection. At least two decisions of the Copyright Council discuss the same question (TN 1989:7 and 1997:12).

5Prepratory works HE 161/90, under article 40 b of the detailed argumentation.

6 These arguments have been presented in the preparatory works of Article 40 b (law proposal HE 161/90), under specific argumentation of the article.

7 This is a logical conclusion of the wording of Artcile 4 of the Act. The same result is presented by Haarmann (2005), page 245.

9 A decision by the Appeal Court of Helsinki on 28 December 1999 (R 99/661) discusses the question of a computer program’s eligibility for copyright protection. At least two decisions of the Copyright Council discuss the same question (TN 1989:7 and 1997:12).

10 Article 9 of the Copyright Act lists works that are not subject to copyright protection, such as Acts and Decrees and these can be considered to be in the public domain. However, this is not an acknowledgment of the concept of granting a work into the public domain, as decided by the author.

13B., PERENS, “The Open Source Definition”, Open Sources: Voices from the Open Source Revolution, http://perens.com/OSD.html.

14 Nor the principles (freedoms) of the Free Software movement, nor the Open Source Definition mandate the copyleft clause. Several FOSS licenses don’t contain a copyleft clause. Examples hereof are the Berkeley Software Distribution (BSD) license and the Apache license.

15 E.g., GPL version 3 Art. 5 stipulates: “You must license the entire work, as a whole, under this License to anyone who comes into possession of a copy. This License will therefore apply, along with any applicable section 7 additional terms, to the whole of the work, and all its parts, regardless of how they are packaged. This License gives no permission to license the work in any other way, but it does not invalidate such permission if you have separately received it.” GPL version 2 Art. 2 b stipulates: “You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License”.